Cable companies losing TV subscribers to rival phone companies

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Cable companies lost television subscribers last year, the first time in almost a decade, as traditional telephone companies attracted more customers with TV packages.

Cable companies have been adding subscribers each year since 2004, according to a report by Convergence Consulting Group Ltd., but saw their numbers slip by 58,000 or 0.7 per cent in 2011.

Telephone companies expanded their subscription base by about 8 per cent over the same time, with Vancouver-based Telus Corp. being the biggest gainer. The report estimates the telephone companies will continue to make gains while cable and satellite providers lose subscribers.

"Overall TV subscriber gains continue to be strong," Convergence founder Brahm Eiley said. "Canada is experiencing far less TV cord cutting than in the U.S."

The report forecasts that Canada will see 180,000 new TV subscribers in 2012, down from 222,000 in 2011. That's about the same number as will be added in the United States, despite the population difference.

Convergence estimates that one million U.S. TV subscribers cancelled their television packages in favour of viewing shows online or through services such as Netflix last year. Only 80,000 did that in Canada.

The report estimates that 18 per cent of Canadian TV viewers legally watched full episodes online last year, and expects that to increase to 19 per cent as viewers slowly change their habits.

That figure doesn't include people who watch television online using services offered by their cable, telephone or satellite provider, which require them to be subscribers to view the online content.

The report estimates that TV online advertising revenues made up only 3.3 per cent of the $3.7-billion of 2011 revenues for Canadian broadcasters and specialty channels. That could increase to 3.8 per cent in 2012, the report estimated.